A knowledge of music theory does NOT make you a better musician unless you have no real musical talent to begin with.
A natural muscician understands instinctually the law of halfsteps. They do not need to be taught that, and will often pull off amazing things that a trained musician will not due to the trained musicians ideas that something shouldn't be done.
Not to mention, whos music theory are you referring to? Western? That's a pretty narrow outlook.
To top it off, as I said before, studying music in school does NOT make a good songwriter. In fact, it can often HURT songwriting. If a keychange or progression or scale sounds right to you, but music theory says it's invalid or 'wrong', you''ve just thrown away something that sounds right to you.
Believe me, all the shit thats written for your most beloved pop stars on your top 40 station were written by people with oodles of music degrees.
You want a job as a studio musician? Get a degree. Want to make your own music? Don't worry about it. Practice practice practice and a good ear are all that truly matters.